When you want to minimize handling and storage time, reduce overall inventory holding costs and improve efficiency in the supply chain, cross docking is the saviour. Companies take advantage of cross-docking to consolidate products from multiple suppliers, break down bulk shipments into smaller lots and reorganize items for efficient delivery to retail stores, fulfilment centres, and customers.
Initially, incoming goods are received at the warehouse or distribution centre where they are usually pre-sorted and labelled for their final destination. Upon arrival, the goods are sorted based on their destination and staging areas are designated for each outbound transportation route or customer. Goods are then moved directly from the receiving dock to the outbound dock without being stored in the warehouse.
By bypassing storage and directly transferring goods from inbound to outbound transportation, cross docking accelerates the order fulfilment process, optimize transportation routes / capacity, and reduce transportation costs.
To make the process accurate and seamless, digital logistics platform can be deployed. Here, the orders can be placed manually or automatically through integration with suppliers' systems via application programming interfaces (APIs). The platform manages inventory in real-time, keeping track of the items available for cross-docking. It monitors stock levels and ensures that the necessary items are available for cross-docking as per the incoming orders.
As goods arrive at the cross-docking facility, they are sorted based on their destinations. The platform helps in managing this process efficiently by providing guidance to warehouse staff on where to place items for consolidation. It generates necessary documentation such as packing lists, shipping labels, and manifests for the consolidated shipments. This ensures that each package is properly labelled and documented for easy tracking and tracing throughout the supply chain.
Once the goods are consolidated, the platform optimizes the routing of shipments based on factors such as delivery deadlines, destination proximity, and carrier availability. The platform facilitates the selection of appropriate carriers based on predefined criteria such as cost, service level agreements (SLAs), and carrier performance. It then books the transportation services with the chosen carriers.
Throughout the transportation process, the real-time tracking and visibility of shipments allows stakeholders to monitor the status of their orders and anticipate any delays or issues proactively. Once the shipments reach their destinations, the platform captures delivery confirmations and feedback from recipients.
Finally, the gathered data from various touchpoints helps to identify trends, optimize operations, and make data-driven decisions for continuous improvement.
However, implementing cross docking requires careful coordination and synchronization of inbound and outbound transportation schedules, as well as efficient sorting and staging processes to ensure timely transfer of goods. Additionally, not all products or industries are suitable for cross docking, as certain goods may require storage or additional processing before being shipped to their final destination.
Cross docking can offer significant benefits for perishable goods, such as food items or flowers, by helping to maintain freshness and reduce waste. As they have limited shelf life, so minimizing the time spent in storage is crucial to maintaining freshness. Cross docking allows perishable goods to move quickly through the supply chain, reducing the amount of time they spend in storage facilities where they could spoil or degrade.
By evading traditional warehousing processes, it ensures that fresh products arrive at retailers or customers in a timely manner, maximizing shelf life, and quality. Cross docking facilities can implement rigorous quality control measures to ensure that perishable goods meet quality standards before being shipped to customers. Additionally, with proper tracking and monitoring systems in place, it's easier to trace the movement of perishable goods throughout the supply chain.
Cross docking facility can quickly adjust its operations to prioritize the handling and distribution of that product, helping to prevent shortages and minimize waste, if there is a sudden increase in demand for a particular perishable product.
Multiple handling steps can be avoided, minimizing the risk of damage or contamination, helping to preserve the quality and freshness of perishable goods throughout the supply chain. By reducing the number of handling and storage steps, the process helps minimize energy consumption, greenhouse gas emissions, and environmental impact associated with logistics operations.
It is particularly beneficial in industries with fast-moving consumer goods, perishable products, or time-sensitive shipments. By leveraging cross docking strategies, companies can enhance the efficiency, reliability, and sustainability of their perishable goods supply chains.